The Central Bank of Nigeria has issued a directive requiring all Point of Sale (POS) operators to route their transactions through licensed payment terminal service aggregators.
A circular published on the CBN’s website on Thursday explained that this initiative aims to improve the tracking and management of electronic transactions across the country.
“To address concerns about funneling all Point of Sale transactions through a single aggregator, the CBN granted a second PTSA license to Unified Payment Services Limited on April 19, 2024.”
In furtherance of the above, the CBN hereby directs as follows: 1 Acquirers are henceforth required to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator PTSAs are required to send PoS transactions to only Processors certified by the relevant Payment Scheme, nominated by the Acquirer and licensed by CBN,” the apex bank noted.
The circular highlighted that the Nigeria Interbank Settlement System Plc was awarded a PTSA license in 2011 to manage the aggregation of POS transactions.
However, to alleviate concerns over routing all transactions through a single aggregator, the CBN issued a second PTSA license to Unified Payment Services Limited in April of this year.
To enhance the tracking of electronic transactions in Nigeria, the Central Bank of Nigeria granted a Payment Terminal Service Aggregator license to Nigeria Interbank Settlement System Plc in August 2011. In response to concerns about channeling all Point of Sale transactions through one aggregator, the CBN granted a second PTSA license to Unified Payment Services Limited on April 19, 2024.
The CBN has mandated that all acquirers, the institutions tasked with processing payments from POS terminals, must route transactions through one of the two licensed aggregators.
Additionally, licensed processors must integrate with both PTSA providers to offer acquirers the flexibility to select their preferred service providers.
The CBN emphasized that payment terminal service providers, who are responsible for deploying and managing POS terminals, must ensure that their devices and applications are compatible with any PTSA selected by the acquirers.
Furthermore, the CBN requires PTSPs to submit monthly reports detailing the number of merchants and agents they oversee, along with the PTSA services utilized.
Likewise, the CBN has required each PTSA to submit monthly reports detailing all transactions processed through their platforms.
As stated by the apex bank, these reports must be sent to the director of the Payments System Management Department within seven days following the end of each month.
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The CBN has also urged all Payment Service Providers (PSPs) to regularize their operations with the PTSAs within 30 days, warning that failure to comply with this directive will result in appropriate sanctions.
It is important to note that the Corporate Affairs Commission announced on July 7 that all Point of Sale operators nationwide are required to register with the commission by September 5.
